L.H. Jenkins, C.J.
1. The Burmah Trading Corporation, Limited, has presented a petition to this Court under the Indian Companies (Memorandum of Association) Act, 1895, asking that an alteration in its 'Memorandum of Association, effected by special resolution, may be confirmed by the Court. As the learned Judge, to whom this class of business is ordinarily, assigned, is disqualified by interest from dealing with the petition, its hearing has been transferred to the present Bench.
2. The petition is opposed both on its merits, and on the ground that the special resolution has not been passed according to law. Before the case can be dealt with on its merits considerable amplification of the evidence appears to us necessary, and though we are prepared to give the parties an opportunity under the circumstances to remedy this defect we have been asked in the first place to deal with the respondent's objection to the validity of the resolution. This accordingly we now propose to do.
3. Though many objections are formulated in the respondent's affidavit, before us they have been narrowed to three, and to these I will limit my remarks. To understand them a few facts must be stated.
4. The resolution was first submitted to a meeting of the Company on the 29th of May, 1902, and according to the report of the scrutineers, the resolution was passed by the requisite majority. Of these 844 votes, two lots, amounting to 124 and 192, which for the purposes of this case may be conveniently classed together, were recorded, if at all, by Mr. Macsulay, the Chairman of the meeting, as proxy for absent share holders. It is conceded on both sides that, if those votes are to be counted, the resolution was passed, but that, if they are not, then it was lost.
5. The arguments consequently have been limited to a discussion on the validity of these votes.
6. Now, the first argument urged against them is that they in fact were never recorded. Though there may have been an absence of formality, I think there is no doubt that Mr. Macaulay intended to vote, and in fact did vote, as a proxy: the proxy papers, under which he purported to act, were placed in the basket appropriated to the votes in favour of the resolution: the proxy papers in opposition to the resolution were placed in another basket: and the scrutineers in the presence of Mr. Shroff, who practically was the representative of the dissentients, treated the votes represented by the proxy papers as properly given, without any protest. Had objection been taken at the time, any want of formality might have been, and doubtless would have been, remedied, and it would not under these circumstances be right to treat the votes as not actually given. The articles impose no particular procedure and the course followed was, in any opinion, sufficient for the purpose of the poll then being taken. Therefore, this objection cannot prevail.
7. Then it is said that the proxy papers were not properly attested, but this objection only applies to 124 of the votes which were attested by Mr. Wallace. The 63rd of the Company's Articles of Association provides that the instrument appointing a proxy shall be attested by one or more witness or witnesses, and it is argued that this provision has not been observed, on the ground that Mr. Wallace was incompetent to attest, inasmuch as he was by the document appointed a proxy: In re Parrott (1891) 2 Q.B. 151 .
8. But to this it is answered, that one attesting-witness suffices, and that this requirement has been observed, because, even if Mr. Wallace's attestation was invalid, there has been a good attestation by Mr. Doggett. In my opinion this is a good answer, for Mr. Doggatn was none the less an attesting witness because he also was a certifying notary, and reading his notarial attestation 1 think the proxy paper was attested by him within the meaning of Article 63.
9. This brings mo to the far more serious question, whether Mr. Macaulay's appointment as a proxy was in compliance with the Articles of Association. We have to be satisfied on this point, for, as stated in Harben v. Phillips (1891) 2 Q.B. 151 the right of a shareholder to vote by proxy depends on the 'contract between himself and his co-shareholders, and where parties have a right depending upon the contract between them and other parties, there all the requisitions of the contract as to the exercise of that right must be followed.
10. Now the objections urged under this head are, that there is no such proxy paper as the articles require, and that Mr. Macaulay had not the requisite qualification for his appointment. The force of these objections must be determined by Articles 62 to 67, which for this purpose 'must be read together. I am not prepared to say, notwithstanding the phraseology of Article 66, that the actual name of the appointed must appear in the proxy paper: I think it would suffice if he were designated by a description, which would fix his identity at the date of the appointment. But we have far more to reckon with here. Article 65 imposes two conditions: the proxy must be a shareholder at the date of his appointment and at the date when he acts. That both these conditions are essential is, I think, made the more apparent when the language of the article is contrasted with that of Clause ii of Table B to Act XIX of 1857. At the time of his voting, Mr. Macaulay was a shareholder: the question is whether the other condition of the article has been satisfied.
11. Then again the instrument under which Mr. Macaulay purports to have acted is not in the form expressly sanctioned by the Articles of Association: it is a power-of-attorney, not limited to an authority to vote, but providing for a variety of other matters. So far as it relates to the power to vote it runs as follows:
Know all men by these presents that I...of...do hereby nominate, constitute and appoint Lewis Alexander Wallace, Alexander Falconer Wallace, John Annon Bryce, Henry Adair Richardson, and Michael Russel Dyer, and all persons who at any time during the oontinuanoe of this Power of Attorney may be partners in the firm of Wallace & Co. of Bombay, howsoever that firm may be constituted, and Frederick Liddell Steel and William Robert Macdonell, Assistants in the said firm, and in the absence from Bombay of all the said persons then the persons or person for the time being holding the procuration of the said firm and managing the said business jointly and each of them severally to be my attorneys or attorney for me and on my behalf and to be my proxy to vote for me and on my behalf at any meeting or meetings of the said existing corporation or any such new corporation to be formed as aforesaid during the continuance of this power.
12. The instrument is dated the 14th day of October, 1881.
13. Now it will be seen that Mr. Macaulay was not appointed by name: had he been, his appointment would certainly have been bad, for at the date of the instrument he was not a shareholder. It is stated before us that he first became a shareholder on the 20th of March, 1889, and that he first came within the descriptions contained in the power of attorney on the 1st of April following; for it was not until then that ha held the procreation of the firm and managed the business in the absence of all partners of the firm from Bombay. Therefore, it is argued, the article is satisfied, for when the power of attorney came into operation as to him, he was a shareholder.
14. But the article prescribes the qualification at the time when the appointment is made, not at any subsequent date to which the operation of the instrument may be postponed, and an appointment is none the less made at its date because its operation is suspended. The appointment is of all persons answering a particular description, irrespective of the qualification the article imposes, and there is nothing in the articles, nor has it been suggested that there is elsewhere, a provision, as a, result of which the possession of shares in the Company is an inseparable incident of the description contained in the power.
15. Can it then be said that the requisition of the articles have been observed? Read together they appear to me to contemplate the appointment of no one but ascertained individuals holding the prescribed qualification at the date 'of the instrument, and not) an appointment such as we have here, whereby 'a number of persons, some ascertained and some not, some at the time qualified and some not, are vested with authority to vote, without any exhaustive attempt at selection between them, and without any limit as to time except the continuance of the firm of Wallace & Co., howsoever that firm may at any time be constituted.
16. No practical difficulty has arisen in this case, but it is easy to Bee that the Company might be seriously embarrassed if an instrument like the present were treated as a compliance with its article; for if good for one it would be good for all. Under the power several parsons are expressed to be vested with authority to vote at one and the same time, and in some cases without indication of preference, so it is manifest that if there were a difference of view among the several would-be proxies, and each claimed to vote, serious difficulties would arise, and the Company might be thereby hampered in the conduct of its affairs.
17. I think, therefore, the instrument does not comply with the Company's articles, and further that Mr. Macaulay, for want of proper qualification, has not been validly appointed a proxy, and as a result I hold that the resolution has not been passed by the requisite majority. The objection of insufficient stamping has not been pressed before us, for under the Indian Stamp Act the votes would not on that ground be void.
18. The result, however, is that the petition must be dismissed with costs, but we can only allow Mr. Shroff half his costs of the first affidavit as it appears to us needlessly prolix.
19. Inasmuch as the right to vote by proxy is not a right claimable under the ordinary law, but is derived from the terms of the 'Articles of Association,' it is essential that the conditions imposed by those articles should be strictly fulfilled.
20. Article 65 runs as follows: 'No person shall be appointed or have authority to act as a proxy who is not a share-holder in the Company.'
21. This, in its plain grammatical meaning, seems to require that the prescribed qualification must exist both at the time when the appointment is made and also at the time when the authority to act under it is exercised. Such a construction would, of coarse, be fatal to an appointment in future of a person not qualified in prosenti.
22. The alternative suggested is that if a person, not a share-holder at the date of the instrument appointing him, becomes a share-holder at the moment when that instrument, SO far as he is concerned, comes into operation, there is a, substantial compliance with the rule. That construction would in effect substitute for the words 'no person shall be appointed' the words 'no person appointed shall have authority to act as a proxy.' It assumes an intention not expressed in the article or arising by necessary implication from the circumstances. If it were correct, the words 'shall have authority to act as proxy' would have sufficed. The words 'no person shall be appointed' would then be redundant and unmeaning. But there is nothing to justify the assumption that those words were retained per incuriam. For the article was advisedly adopted in lieu of the model supplied by the Legislature in No. 44 of Schedule B to the Act (XIX of 1857) then in force. And there is no apparent reason for supposing that the requirement relating to the appointment, was deemed less essential than the requirement relating to the exercise of the authority thereby conferred. To hold, therefore, that the real intention was only to insist on the prescribed qualification when the appointment came into operation, is mot justified by the plain meaning of the words used. The circumstances in which the articles were drafted would, if it be permissible in such case to speculate as to the intention, induce the contrary conclusion. For the articles were prepared to exclude and replace those is the Schedule B to the Act which would otherwise have applied, It would seem, therefore, legitimate to infer that those who framed the articles had that schedule under consideration and intended to express all deviations from its essential principles with precision. No. 44 of the schedule expressly provides that no instrument appointing a prosy shall be valid after the expiration of one month from the date of its execution. This time limit was discarded. But no further departure from No. 44 was allowed, and Article 65 deliberately retained the provision restricting the selection of proxies to shareholders in esse at time of the appointment, precluding appointments of suspended validity.
23. But even if the articles be read apart from all extrinsic indications as to intension, is it possible, in applying the strict principle of construction followed in Harben v. Phillips (1883) 23 Ch. D. 14 to infer that it was the intention in Article 64 and Article 65 to authorise the appointment of a person who did not possess the prescribed qualifications till nearly ten years after the data of the instrument appointing him? To construe those articles with such latitude would be to deprive the terms of the agreement binding on the shareholders of all certainty. If a meaning so remote from that which is expressed could be imported into the articles, it would, I think, tend to destroy the confidence which the shareholders of companies are entitled to place in the binding force of 'Articles of Association.'